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H Dip dissertations

A Critical Analysis of Recent Supreme Court of Appeal Judgments That Have Deviated From The Stare Decisis Principle

Author: Lizl Pretorius

Abstract

The decisions and methodology used by the Judges in a higher court, such as the Supreme Court of Appeal is binding on the lower courts. It is therefore imperative that the principles established are sound and in line with the intention of the Legislator when hearing matters on tax cases on areas where the Income Tax Act No. 58 of 1962 ("IT Act”) is ambiguous or unclear.

In recent tax cases heard by the Supreme Court of Appeal, the tax community has been left puzzled and in some cases outraged by the comments made by the Judge(s) and for passing judgments which have deviated from the stare decisis principles that have become embedded in our Law and have been applied for many years.

In the cases reviewed the Judges have found that the stare decisis principle is not applicable to the case or needs to be expanded in order sustain its usability.

The objective is to determine if the reasoning and rationale followed by the Judge(s) are sound and whether or not it is in line with the conclusion that a reasonable man would reach if he was presented with the same facts.

We will delve into three recent court cases, and examine the reasoning of the Judge(s) for reaching a different conclusion and the reasons why the tax community was not impressed with the conclusions reached in the judgment handed down. Where possible, the principles determined by similar foreign cases have been mentioned, as well as how the new principles have been applied in cases heard since the judgments were handed down.

The dissertation is performed with the view of assisting the reader to ‘think outside of the box’ and to broaden their range when evaluating the facts and circumstances of the case and making their own conclusion based on the information presented. The basic principles of the IT Act should form the foundation on which you formulate your argument, and only the ambiguous portion which is open to interpretation should be the focus point of basing your arguments to the Judge. No ambiguity should exist in the case presented (i.e. no stone unturned) in order to avoid any curve balls to be thrown by the Judge deciding the outcome of the case.

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